TELUS Corporation (NYSE: TU) and Neustar (NYSE:NSR) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Volatility & Risk

TELUS Corporation has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Neustar has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Profitability

This table compares TELUS Corporation and Neustar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TELUS Corporation 9.55% 18.75% 5.44%
Neustar 15.50% 19.28% 8.80%

Earnings & Valuation

This table compares TELUS Corporation and Neustar’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TELUS Corporation $10.22 billion 2.10 $3.23 billion $1.58 22.84
Neustar N/A N/A N/A $3.27 10.24

TELUS Corporation has higher revenue and earnings than Neustar. Neustar is trading at a lower price-to-earnings ratio than TELUS Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for TELUS Corporation and Neustar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TELUS Corporation 0 0 5 0 3.00
Neustar 0 3 0 0 2.00

TELUS Corporation currently has a consensus target price of $45.00, indicating a potential upside of 24.69%. Neustar has a consensus target price of $29.50, indicating a potential downside of 11.94%. Given TELUS Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe TELUS Corporation is more favorable than Neustar.

Institutional and Insider Ownership

51.1% of TELUS Corporation shares are held by institutional investors. Comparatively, 88.8% of Neustar shares are held by institutional investors. 2.9% of Neustar shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

TELUS Corporation pays an annual dividend of $1.58 per share and has a dividend yield of 4.4%. Neustar does not pay a dividend. TELUS Corporation pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Neustar beats TELUS Corporation on 8 of the 13 factors compared between the two stocks.

About TELUS Corporation

TELUS Corporation (TELUS) is a telecommunications company. The Company provides a range of telecommunications services and products, including wireless and wireline voice and data. Its data services include Internet protocol (IP), television (TV), hosting, managed information technology and cloud-based services, and certain healthcare solutions. The Company operates through two business segments: Wireless segment and Wireline segment. Its wireless and wireline businesses are primarily operated through TELUS Communications Company (TCC). The Company offers business services, including healthcare, across wireless and wireline are supported through TELUS sales representatives, product specialists, independent dealers and online self-serve applications for small and medium-sized businesses (SMBs). Its business process outsourcing services are supported through sales representatives and client relationship management teams.

About Neustar

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

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